How Discrete GPU Market Growth Can Boost Nvidia's Results

The market for GPUs, and discrete GPUs in particular, has been Nvidia’s bread and butter, as the company has garnered a substantial position in this market in the last few years. In fact, a recent survey conducted by Steam, the largest digital game distribution platform in the world, indicated that nearly 85% of gamers on Steam use Nvidia’s discrete GPUs. Needless to say, growth in the discrete GPU market is critical to Nvidia’s growth and overall valuation.

So how big the market will be in 2018? We have created aninteractive dashboard that shows a discrete GPU market sizing calculator. Our estimated market size is based on certain assumptions around expected PC sales, discrete GPU attach rate, segment composition in terms of GPU pricing, and expected growth in prices. While our base estimates peg the market size at nearly $11 billion, you can modify the assumptions to come up with your estimate for the market.

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Forecasts Based on Pricing, Product Mix

We estimate that the average GPU price in Q4’17 stood at roughly $107. We expect this figure to increase to $115 for full year 2018 based on our expectations of changes in product mix and overall price increase. We believe that the percentage of high-end and mid-tier discrete GPUs in overall discrete GPU sales will increase due to strong demand from gamers and crypto-currency miners, and due to the fact that integrated graphics have significantly improved over the last few years, cannibalizing sales of low-end discrete GPUs. We further expect that more than 96 million discrete GPUs will be sold in 2018, assuming global PC sales of 258 million and a discrete GPU attach rate of a little over 37%. For more details, see our interactive Discrete GPU Market Size Calculator.

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